Transcript

• Session Spotlight: Structured Hedge Products’ Role in Flour Component Pricing
• Hello everyone. My name is Jared Morgan, and I am the vice president of Global Education here at StoneX Financial. At StoneX, I've dedicated my career to developing and implementing innovative educational programs focused on commodity markets and price risk management. We tailor those seminars to a diverse group of commodity producers and consumers just like yourself, and for that reason, I'm particularly excited to engage with the attendees at IBIE. That's kind of for a good reason. I was born and raised a Kansas farm boy as well as a graduate of the Kansas State University Milling Science program. So it's safe to say that wheat has been a focal point of my life for quite some time. So I invite you to join Adam Stout and I for our brief educational session titled Structured Hedge Products Role and Flower Component Pricing. Thanks, and I look forward to seeing you there.
• What topic or trend does this session cover, and why is it important?
• Almost everyone here at IBIE is exposed to fluctuating wheat prices, although a much smaller cross section of you deal with the raw commodity of wheat itself. Let me add a little bit more perspective to that statement. Whether you're a wheat trader dealing specifically with wheat itself or a baker using various qualities of flour to bake your products, your bottom line is impacted by the wheat futures market. Although there is not a contract for flour, there certainly is a proven method of utilizing available contracts to manage ingredient costs and production margins, and that's exactly what we'll explore in the structured hedge products role and flower component pricing education session hosted by StoneX at this year's IBIE event. Arguably now more than ever, commodity market volatility has proven itself to be sensitive to an array of outside factors, and the value of a price forecast without a strategy to manage the risk of unforeseen circumstances exposes companies to margin compression, financial loss, and demand destruction. Join us as we discuss ways in which you can deploy strategies to take advantage of market opportunity while at the same time insulate yourselves from the risk of it slipping away.
• What will attendees learn from this session?
• In the StoneX education session titled Structured Hedge Products Role in Flower Component Pricing, you will gain a comprehensive understanding of structured hedge products and how they are used in managing price risk associated with wheat futures. We will explore various hedge strategies including forward contracts, futures and options contracts, and over the counter or otherwise known as OTC swaps. We'll also explore the mechanics of each of these strategies and how they apply to pricing wheat futures for flour usage. Also, you will learn to evaluate the potential benefits and drawbacks of each of these strategies as well as understand the risks involved, including price volatility, margin requirements, and counterparty risk. To round everything out, we will apply different hedging strategies to hypothetical scenarios involving price fluctuations in wheat futures. By the end of this session, you will develop the ability to choose the most appropriate hedging strategy based on specific business needs and market conditions and analyze how to balance cost certainty with flexibility in your hedging strategy approach.